In another reminder that trickle-down economics doesn't work, Digby points out that a record Dow doesn't mean jobs:
The Dow Jones Industrial Average hit another record high yesterday, closing at a nosebleed-worthy 15,680.35. This isn't exactly a surprise, given that corporate profits are at or near record highs and still growing strongly. So where are all the jobs?
The fact that "Business, and big business in particular, is doing very, very well" is endlessly publicized:
Yet unemployment remains high, wages are stagnant, economic mobility is weak and the middle class is shrinking. Corporations are sitting on vast accumulated wealth, but are not investing that wealth in human capital that advances broad-based prosperity. [...]
We do, on the other hand, have plenty of evidence that high levels of income inequality are very damaging to an economy. We have plenty of evidence that corporations are unwilling to invest in new products because they're not certain that consumers will be able to afford them. Moreover, we know that unemployment was lower and the nation more prosperous when taxes on the wealthy were higher, when regulations on Wall Street were more stringent, and when organized labor was more powerful. [...]
The argument should by all rights be over. Much as in other areas of scientific debate, conservatives have plainly lost this argument in the realm of fact, and have resorted to restating ideological opinions in the hope that repetition will become accepted truth.
John Nichols suggests that a "Robin Hood Tax" might help solve our fiscal problems:
That's a tax on high-stakes financial transactions, as proposed in the House by Congressional Progressive Caucus co-chair Keith Ellison, D-Minnesota. Ellison's "Inclusive Prosperity Tax" would raise hundreds of billions in new revenues. "This is a small tax on Wall Street transactions to meet the needs of our nation," says Ellison, who asks: "Didn't America step up to the plate when Wall Street needed help?"
The congressman's proposal would also reduce harmful market speculation. As Ellison says, "Gambling on Wall Street does not benefit our society."
Paul Krugman discusses rentiers, entitlement, and monetary policy, pointing out that inflation fears have become "yet another reason for the Fed to tighten despite a still-depressed economy and inflation falling well below target:"
Many of the people making these arguments started with dire warnings about runaway inflation; but when inflation failed to materialize, they didn't change their policy views, they came up with new rationales for doing exactly the same thing.
This kind of behavior -- ever-shifting rationales for an unchanging policy (see: Bush tax cuts, invasion of Iraq, etc.) -- is a "tell". It says that something else is really motivating the policy advocacy. So what is going on here? When I read Gross and others, what I think is lurking underneath is a belief that capitalists are entitled to good returns on their capital, even if it's just parked in safe assets. It's about defending the privileges of the rentiers, who are assumed to be central to everything; the specific stories are just attempts to rationalize the unchanging goal.
He also reminds us that "we are still in a liquidity trap:"
But right now we're awash in excess savings with nowhere to go, and the marginal social value of a dollar of savings is negative. So real interest rates should be negative too, if they're supposed to reflect social payoffs.
This really isn't at all exotic -- but obviously it's a point wealth-owners don't want to hear. Hence the constant agitation for monetary tightening.
In explaining the high cost of low taxes, Smirking Chimp suggests that "Delinking taxes from the services they pay for has arguably been the modern conservative movement's greatest success:"
No politician has ever been booed off a stage for promising to cut taxes. But decades of public opinion polling shows that, with a few exceptions, Americans are actually quite fond of the goods and services the public sector provides. They may be wary of the idea of "big government" in the abstract, but they like well-maintained infrastructure, safe food and clean water, efficient firefighting and policing, Medicare and Social Security and virtually every other government-provided service you can name.
This paradox is well known to politicians and policymakers, and has caused a good deal of hand-wringing among those who favor a progressive tax system that raises enough funds to cover the services Americans expect. But there's another consequence of anti-tax demagoguery: low, low taxes come with a steep cost. In fact, a lower tax bill - especially for federal taxes -- actually works against the economic interests of most Americans.
That's because we pay ridiculously high out-of-pocket costs for things that are provided by the public sector in other developed countries.
"Americans pay[ing] through the teeth for social services," the piece continues, "isn't an accident:"
It's the result of decades of policymaking based on what's been sold as an "ownership society." Yale political scientist Jacob Hacker called it a "personal responsibility crusade" that's been firmly embraced by corporate America and conservative politicians.
In his book, The Great Risk Shift, Hacker detailed how a huge share of the retirement security and health care burden has been shifted from employers and the government onto the backs of working people themselves. These are the insurances that mitigate one's risk in a capitalist society, and their loss has left American families exposed and economically insecure.
Who should the economy work for--the Sheriff of Nottingham, or the people?